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Markets upbeat as oil prices move back

by LLB Reporter
23rd Nov 22 11:07 am

Despite the prospect of the Federal Reserve’s latest minutes reminding markets that it has no intention of taking its foot off the acceleration pedal for interest rate hikes, investors in the US, Asia and Europe seem remarkably upbeat ahead of the central bank’s announcement.

Russ Mould, investment director at AJ Bell, said: “Nervousness yesterday soon turned into a more upbeat mood, with the S&P 500 closing 1.4% ahead at 4,003. Asian markets woke up with a spring in their step, clawing back some of the recent losses caused by concerns over another Covid flare-up in China.

“The FTSE 100 was once again lifted by commodity stocks as oil prices move back up following a recent slump.

“Brent Crude started the year around the $78 per barrel level before racing ahead to $122 in June as the Russia/Ukraine war caused chaos in the energy markets.

“Oil has experienced a rapid pullback since the summer amid fears of a slowdown in corporate and consumer activity. Oil is a bellwether for the global economy and the prospect of a recession means a bleaker outlook for demand. Having bottomed out at $87.45 earlier this week, markets now appear to be taking the view that the oil price has fallen enough.”

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